S4 E1 | How Two Coders Built a $7.5 Billion Fintech | Destiny Avenged

For this episode, we have something special lined up. Two of our colleagues, Jatin and Alok have added some of their perspectives to enrich the transcript so that it gives you more insight on the Razorpay journey. You will periodically come across their name in bold throughout the transcript.


[00:00:00] Karthik Reddy: Rumor has it, there were 100 plus rejections. 

[00:00:02] Harshil Mathur: I don’t think I ever kept count, but yeah.

[00:00:03] Shashank Kumar: I think we met a lot of. 

[00:00:04] Harshil Mathur: We met 100’ish bankers, I would say. 

[00:00:06] Shashank Kumar: We used to go to bank branches in t‑shirts and all, and we upgraded to shirts. 

[00:00:10] Karthik Reddy: Right. 

[00:00:10] Shashank Kumar: Then, we upgraded to suit. 

[00:00:12] Karthik Reddy: Two different towns, Jaipur, Pune. Mid-2000s. No startup activity, I’m guessing. Why would you do like payment gateway? Or like what motivates you? 

[00:00:22] Harshil Mathur: How could something digital be harder than the physical?Just start accepting cash. It’s easier to accept cash in India. 

[00:00:27] Shashank Kumar: The list of questions itself was very scary. Like, Hey, how long have you been operational? Are you profitable? Where is your physical office? Can you send us photos of your office? 

[00:00:36] Harshil Mathur: Honestly, we had zero expectation of getting into YC. We just saw that form. We thought that there’s no harm, Zero expectations. We got that call from YC that you are in and we were over the moon. The next biggest goal for me is like, how can we take Razorpay to that level where it is an institution that runs and sustains on itself.

[00:00:55] Karthik Reddy: Razor is successful because.

Welcome to Season 4 of the Blume Podcast. This year’s theme is Destiny Avenged. 

Each conversation spotlights people who fought past rejections and near-failures to earn a chapter in the book on India startup history. 

This season is brought to you in partnership with IDFC FIRST Bank and Ultrahuman, a Blume Portfolio Company.

More about them later in the episode.

Since the inception, they’ve driven down India’s payment failure rates, and scaled a 2,400 strong team that still runs on radical transparency and hacker speed. We are about to unpack the darkest nights, the fastest pivots, and the mindset that turned two restless coders into architects of India’s digital finance rails. Harshil, Shashank, welcome to the Blume podcast.

[00:01:50] Harshil Mathur: Thanks a lot for inviting.

[00:01:52] Karthik Reddy: Thanks for taking time again. This season I’m trying to evoke memories of was this your destiny or you’re shaping it as you go along. And that’s a theme for the season.

So, what I would try and do today is dig a little into your childhood stories in terms of what motivated you, what gets people into IIT today, or even say 20 years ago. And then, yeah, a little bit of, of course, you went to your jobs, decided that wasn’t the happy place you wanted to be in. Why would you do like payment gateways or what motivates you to pick on the entrepreneurial journey that you want to?

We’ll try to extract that and we’ll take it from there. Yeah.

[00:02:38] Harshil Mathur: Sounds good.

[00:02:39] Karthik Reddy: Super. Two different, towns, Jaipur, Pune. Mid-2000s, no startup activity, I’m guessing, very, very different world. If you had to play back your years from like 10 to 15, which is what shapes you into engineering karna hai, medicine karna hai. So, what drove you to those decisions? Either of you, both of you can answer.

[00:03:04] Harshil Mathur: Sure. Let me start. I grew up in Jaipur. 

In general, when you’re growing up in our middle class family, there are only two things. And I was good at studies. So, I was typically get a first or second rank in school. And when you are that way in a middle class family, there only two options, either you have to become a doctor or an engineer.

[00:03:25] Karthik Reddy: Yeah. It’s still the same. It doesn’t change, decade after decade.

[00:03:29] Harshil Mathur: So, those were the two options. I think for me it was very clear. I really didn’t like medicine much. I didn’t like blood and all that. So, I was very clear I will go into engineering, which means IITs. So, I don’t think there’s too much complication in that. Got into. I think my first intro to competitive exams happened with NTSC, which was used to be the.

[00:03:51] Karthik Reddy: Yeah, 10^th grade or ninth grade. 

[00:03:52] Harshil Mathur: 10^th grade competitive exam. That was the first time I prepared for competitive exams in a way, and from NTSC, I moved into coaching for IITs and JEE and so on. And I think that became the direction for me very simply. 

[00:04:09] Karthik Reddy: And what about you, Shashank? 

[00:04:12] Shashank Kumar: I think 10 to 15. I mean I used to spend a lot of time on computers.

[00:04:19] Karthik Reddy: Okay.

[00:04:19] Shashank Kumar: My father got me a.

[00:04:20] Karthik Reddy: Early geek. 

[00:04:21] Shashank Kumar: Early geek. I somehow liked doing whatever you do on computers, like doing simple programs.

I would go out and play as well a lot in the field and all, like cricket, football, but that didn’t used to be as much fun for me. 

I would spend, I don’t know like, 4 – 5 hours, 6 hours on computers during summer holidays or, even more. Also, play a lot of games and everything.

I was good at maths, but I wasn’t like, as Harshil said, topper in the school or not. I would score, fine. I think in 11^th, 12^th, a lot of my friends were preparing for IIT. And, I actually didn’t have the confidence that I’ll get through IIT.

So, I was like, okay, computer is what I like. Maths is what I like. So, eventually I want to study either maths or computer science. That was what I thought will be good for me. And, so the natural thing to do is to prepare for engineering, and everyone around me was preparing for engineering. So, I thought I’d also do that. But I wasn’t sure if I was cut out to, clear IIT given how extremely competitive it is. So thankfully that happened, so I’m grateful for that. 

[00:05:40] Karthik Reddy: Were there entrepreneurial streaks in the family lines for either of you? 

[00:05:44] Harshil Mathur: Not particularly. It was very service-oriented family. My dad worked in a bank. I think his dad also used to work in a bank, so.

[00:05:51] Shashank Kumar: Yeah, I, don’t think there was any like. Even in the extended family, most of the folks were in services. There are some extended relatives who are probably running like a shop, like a grocery shop and all. 

[00:06:02] Karthik Reddy: So, both of you get into Roorkee. So that’s one common connection if you have one.

[00:06:07] Harshil Mathur: And both of our dad used to work in bank. 

[00:06:11] Karthik Reddy: Okay. 

[00:06:11] Harshil Mathur: So, that is common in terms of upbringing. 

[00:06:18] Shashank Kumar: That too…

[00:06:18] Harshil Mathur: I probably had one extended uncle, my mama, who ran a business himself. He was one of the first ones in the family to run a business. And he used to say that, Hey, you should try for entrepreneurship at some point of time. And this was in 8^th, 9^th. Then I didn’t even understand the word entrepreneur. I couldn’t even pronounce it well. So, I think I heard it, but it was in very, very back of the mind.

[00:06:37] Shashank Kumar: For me. I grew up in Patna, Bihar. I think only thing that just talked about there is like you become an IAS.

[00:06:46] Karthik Reddy: That’s right. IAS is big. All good stuff. But how did the fateful meeting at Roorkee happen?

[00:06:54] Harshil Mathur: I was a junior to him in college.

[00:06:57] Karthik Reddy: Okay.

[00:06:57] Shashank Kumar: One year junior.

[00:06:59] Harshil Mathur: One year junior. So he got into computer science, but while I was very interesting computer, similar to him, like used to like, would be in computers seven hours a day since my 5^th standard, but unfortunately didn’t get enough rank in the IIT to get a computer science branch. Got into mechanical but was very deeply interested in computers and building something.

So I used to spend, I would try to figure out like, how do I keep my love for computers alive? How do I keep my love for coding. So, I was searching for the answer. And I found a lot of similar juniors who were getting into various branches, but wanted to spend their evenings and weekends like writing code.

And we needed mentors. So, I got connected to Shashank who was a senior, and of course, he was in computer science. So I got connected to him and I told him like, Hey, like some of us wanted to do that. He was also connecting with other people, similar people in computer science as well. While they were in computer science, but most of the study in college is actually very theoretical. 

[00:07:54] Shashank Kumar: Very acadamic. 

[00:07:54] Harshil Mathur: You don’t get to code. 

[00:07:56] Karthik Reddy: That’s right. 

[00:07:57] Harshil Mathur: So, somebody like him also, while he was in computer science, he also wanted to spend his evenings like writing code, like doing practical applications for computer science. So that’s how he got connected. I think he called me what his room one and said come over and tell me what all are your interests? What will you do? So I went over. I showed him the stuff I’ve built, showed him the things that I’ve built over the years. Things that I keep doing over the weekends and I think maybe he should talk about how he was, maybe impressed or not, but we stayed connected after that.

[00:08:24] Shashank Kumar: Yeah, I think the surprising thing, I mean, and this is IIT Roorkee, right? This is one of the good colleges in the country. 

[00:08:30] Karthik Reddy: Yeah.

[00:08:30] Shashank Kumar: The surprising thing even back then was that the college didn’t have a good technical culture of writing, actually writing software, right? And that just felt very outdated.

[00:08:42] Karthik Reddy: Yeah. 

[00:08:43] Shashank Kumar: Because they were like, Hey, like we should be doing something and putting it out for the world to see that we can build something crazy application even as students. It doesn’t matter, like whether.

[00:08:52] Karthik Reddy: It’s a hotbed of all innovation in the West.

[00:08:55] Shashank Kumar: Absolutely. Absolutely. So that kind of, I think, thought process from the side of professors wasn’t there, it was more academic in nature, but we thought, I wasn’t really good at studies even in college, but I thought, like, hey, like, I want to try my hand at this..

[00:09:09] Karthik Reddy: You’re talking about 12, 13, imagine our plight in 94.

[00:09:15] Shashank Kumar: Yeah. I can’t imagine that. 

[00:09:17] Karthik Reddy: But, yeah, same buildings. It was a lovely experience, lovely campus. Which hostels, by the way, where did you guys spend most of your time?

[00:09:24] Harshil Mathur: So, in Roorkee, the hostels are given by year.. So there’s no same.

[00:09:28] Karthik Reddy: That has changed. 

[00:09:28] Harshil Mathur: Yeah. Yeah.

[00:09:29] Karthik Reddy: So it was the same. I thought it had changed before you guys started.

[00:09:31] Harshil Mathur: Now, it’s first year, second year, third year, you get based on year. So the entire year is put together in one hostel. So it’s not one single hostel. 

[00:09:37] Shashank Kumar: Yeah. I think I was in Azad Bhawan, like computer science in that batch was in Azad Bhawan.

[00:09:41] Harshil Mathur: I was in Govind in the fourth year.

[00:09:43] Shashank Kumar: But see, the thing is, I don’t think we spend a lot of time in our hostels. Like, we connected together and we created this.

[00:09:50] Karthik Reddy: And this initiative, SDS labs was your baby or like, did it exist?

[00:09:54] Harshil Mathur: Us and three, four people. So, me, him, there was one more senior of ours. There was two my batch mates, five seven of us, I think. We got together and we said we all want to write code. Let’s like create some sort of a way for us to meet and build applications also. 

[00:10:08] Karthik Reddy: And when you graduated, did that tradition?

[00:10:11] Harshil Mathur: It still continues.

[00:10:12] Karthik Reddy: Still continue?

[00:10:12] Harshil Mathur: SDS Labs still continues as a college group.

{Jatin’s comment: SDS Labs wasn’t just a coding club — it became a launchpad for real builders. The fact that it still runs today shows how a student-led initiative can outlast its founders and create a culture of innovation on campus}

[00:10:14] Shashank Kumar: Still an aspirational group for people to get.

[00:10:16] Harshil Mathur: So, we set it up and then, we had to first find space for it. So we had to find a location from the authorities. Then, we had to find funding for it. And I can tell you, we raised almost 20 – 30 lakh rupees for that. I can tell you it was harder than any money I’ve raised from VCs, because raising money from government institutions, like making a proposal, getting it approved, not just raising, getting approval of budget, but then actually spending that money and all of that was really painful. But 

[00:10:45] Karthik Reddy: I am doing my social service back for the college right now. I’m in the TIDES.

[00:10:49] Harshil Mathur: Okay. Yeah. Yeah.

[00:10:50] Karthik Reddy: The board as well, so I know how difficult it is.

[00:10:53] Shashank Kumar: And you should share some of the stories on how like we have to get funding approval, if you have to buy a monitor. 

[00:10:59] Karthik Reddy: Yeah. 

[00:11:00] Shashank Kumar: Or if you have to buy like a tv, where we can teach students, right? If, we just write tv, I don’t think we’ll get approval. So we have to write like presentation monitors. And because you want to present to students, right? 

[00:11:11] Harshil Mathur: So, we had to find the right hacks and all of that to get approvals. But when we set that up, once we set the structure up, then I think almost all of our evenings, weekends, everything we spent in that lab. So, we wouldn’t spend any time, like most people in my branch don’t know me well. 

[00:11:27] Karthik Reddy: Yeah. 

[00:11:27] Harshil Mathur: Because I didn’t spend any time in my hostel. Like we would be up till 2:00 AM 3:00 AM in the night writing code building stuff.

[00:11:34] Karthik Reddy: What are the best projects that came out of that. And nothing was worthy of starting up at that point.

[00:11:39] Harshil Mathur: So, first of all, in college you’re not thinking of monetization, you’re not thinking of acquisition, you’re just building stuff because it’s fun. So, a lot of stuff was just discarded. We just built it. It’s cool. Hey, it looks cool and you’re happy.

[00:11:50] Shashank Kumar: And we launched it. See, I think one of the limitations, right? Why, because I thought about that question earlier. There was not good internet in college. Okay. So a lot of stuff that we did, we could only launch in college. We couldn’t launch outside college.

[00:12:04] Harshil Mathur: Scale outside. So, one of the things that I launched in college was, we used to watch matches, cricket matches. And at that point of time, we had to go down to TV rooms to watch matches. There’s no Hotstar. There was no online streaming. Internet wasn’t great. 

[00:12:18] Karthik Reddy: That’s right.

[00:12:18] Harshil Mathur: So we had to go down to a TV room in hostels and watch.

[00:12:21] Karthik Reddy: That’s right in the common room.

[00:12:22] Harshil Mathur: So, we got a disc TV and connected it to a tuner card in a desktop and then streamed the cricket matches over the local internet.

[00:12:32] Karthik Reddy: Local LAN. Yeah.

[00:12:33] Harshil Mathur: It got really popular. We built an entire infrastructure around streaming and how do you do it, low network speeds and all of that. So like an early version of our. 

[00:12:41] Shashank Kumar: A college version of Jio Hotstar. 

[00:12:44] Harshil Mathur: In that.

[00:12:45] Karthik Reddy: Private Jio Hotstar. 

[00:12:47] Harshil Mathur: Yes. And we ran it and it got really popular. We really enjoyed it. And again, there’s no, like outcome that you’re expecting, that you’ll build cool stuff on top.

Like how can people send messages and those messages are displayed and so on. So you build stuff on top of it. It was just for fun.

[00:12:59] Karthik Reddy: Very, very cool. And then, both of you took jobs clearly. Maybe you didn’t have a compelling idea at that point. To say, Hey, we’ll go startup and a year apart, I’m guessing. Yeah. So Microsoft, Schlumberger. And how do you connect back then? Usually you lose touch, especially if you’re not in the same batch, if you’re like in two different parts of the world, which is what it seemed to be.

[00:13:21] Harshil Mathur: So these stories are different from different perspective maybe?

[00:13:24] Karthik Reddy: Yeah. Both positive.

[00:13:26] Harshil Mathur: This is my perspective. I think, the first thing happened is when he got a PPO offer from Microsoft from his internship. 

[00:13:33] Karthik Reddy: Yeah. 

[00:13:33] Harshil Mathur: And before he was leaving, he once came to my room and discussed that, yeah, I’m going to Microsoft in US, but, we should stay in touch. We should, with all the time we have spent together building stuff in SDS labs, I feel we have a lot of chemistry that we can build something together. So you stay in touch and figure out, if we can do a startup or something at that point of time. And I said, sure, this guy’s saying this, but once he goes to US, he’s going to forget all about it. So we’ll see who comes back from US, who does a startup. So I said, and he was one of those.

[00:14:01] Karthik Reddy: Sounds like a nice, sweet parting message.. 

[00:14:02] Harshil Mathur: Yeah. And he was one of those guys who got this one crore type package. It’s just popular in the campus. It came in newspapers. So like with that, I said, you get one crore rupees, you’re not coming back. So I said, sure. We’ll stay in touch. Let me know when you think of coming back. 

[00:14:18] Shashank Kumar: Yeah. 

[00:14:18] Harshil Mathur: And that’s when we lost touch. But the second part, you should tell. 

[00:14:22] Shashank Kumar: I’ll tell you, I think, when I graduated, I mean, I got a PPO offer from Microsoft. But actually I had a very good B2B project in college. So I did it with two other friends and I put it to them, Hey, this project is very interesting. As we spent almost one, one and a half years doing it. Should we put it out commercially, commercialize it, not as a startup, because that’s like a big step, but maybe make an attempt to commercialize it and see what we can do with it. And they mostly said no. Because I was always like, yaar, job and all. 

[00:14:57] Karthik Reddy: And this was in while you were at their Seattle headquarters?

[00:15:01] Shashank Kumar: No, this was in college. 

[00:15:02] Karthik Reddy: In college.

[00:15:02] Shashank Kumar: This was when I was graduating. Our project got the best project for our batch in that year. 

[00:15:09] Karthik Reddy: Got it. 

[00:15:11] Shashank Kumar: And it was very nice one. But I couldn’t commercialize it, because I thought let’s take it forward. It’s very innovative, right? And then when I went to Microsoft, actually it was very different. When I went to US, my thought, I’m going there. I don’t know if I’ll ever come back. And most of my friends were like, they’ll come back in three years when the Visa expires. You have to renew after three years.

[00:15:34] Karthik Reddy: That’s correct.

[00:15:35] Shashank Kumar: So, they’ll most likely be there for three years and then they’ll come back. But what ended up happening is reverse. So I was probably one of one out of 10 people or eight people who came back and most of them stayed back there.

[00:15:47] Karthik Reddy: Interesting.

[00:15:47] Shashank Kumar: And, the way I think about it, I think, Microsoft journey was really good, very good job, very good pay. For the first time I felt like I’m earning money, right? and rather than like just living hand to mouth.

[00:16:02] Harshil Mathur: He used to drive a Mustang in US.

[00:16:05] Karthik Reddy: The American Dream.

[00:16:06] Shashank Kumar: The American Dream 

[00:16:07] Karthik Reddy: Ford Mustang.

[00:16:07] Shashank Kumar: Honestly, right? Driving a food last night, travel doing a lot of road trips. just going around having fun.

[00:16:14] Karthik Reddy: Yeah.

[00:16:14] Shashank Kumar: I think Microsoft has a good place. 

[00:16:16] Karthik Reddy: So what changed? What did fate have? Fate had other plans, clearly?

[00:16:20] Shashank Kumar: Yeah. I think the one thing that I couldn’t get over was just the impact.

[00:16:27] Karthik Reddy: Yeah. You like a cog in the wheel there. 

[00:16:30] Shashank Kumar: I’m like a cog in a wheel and I think, at that time I used to resent it, but I understand hey, like it’s a large company’s, that’s how it works. I’m the junior most person.

[00:16:38] Karthik Reddy: Yeah. 

[00:16:38] Shashank Kumar: You earned some credentials in the system and then maybe you’ll get it. 

[00:16:41] Karthik Reddy: That’s right. 

[00:16:41] Shashank Kumar: If I would ask bunch of strategy questions and this and that and I won’t get any answers. Not their fault. But I also felt a very important thing, which is that, we have got the best education. What I’m doing there, while it’s interesting, it’s not the most challenging problem. Like it can be done by most of the other folks. 

[00:17:01] Karthik Reddy: Yeah. 

[00:17:02] Shashank Kumar: It didn’t sit well with me like the grade, the good education that we have got, which is like 90% plus subsidized, the IIT education is literally heavily subsidized. Right?

[00:17:12] Karthik Reddy: That’s right. Crazy subsidized.

[00:17:12] Shashank Kumar: Crazy subsidized. That we are the top students or whatever in the country. 

[00:17:18] Karthik Reddy: Yeah. 

[00:17:18] Shashank Kumar: And at the end of the day, like I’m doing something which can be done by most people. I’m doing something which contributes to US GDP. I’m doing something, where I don’t have a lot of say.

[00:17:29] Karthik Reddy: Yeah. 

[00:17:29] Shashank Kumar: So that somewhere fundamentally didn’t sit well with me. 

[00:17:33] Karthik Reddy: So who sent the first love letter? Who’s reached out to who?

[00:17:36] Shashank Kumar: So I reached out to a bunch of people. So

[00:17:39] Harshil Mathur: I was not his first choice.

[00:17:40] Shashank Kumar: I tease him that actually not my first choice. I reached out to a bunch of, Hey, let’s do something, let’s do some side project. It’s not do a startup. But over the weekend or nights, let’s do something which we can, have fun with. But to Harshil’s credit, he’s the only one who said yes. 

[00:17:57] Karthik Reddy: Fantastic. Fantastic.

[00:17:58] Harshil Mathur: I think on my side things are different. I went to Schlumberger.

[00:18:01] Karthik Reddy: That’s right.

[00:18:02] Harshil Mathur: On day one I realized this is not the job I want to do for my life. Like it is a good job. It pays a lot, but at the end of the day, you are doing manual work.

[00:18:10] Karthik Reddy: Were you in oil rigs actually?

[00:18:12] Harshil Mathur: I’m in oil rigs. The work that you do that it’s quite expensive. Because oil rigs are like very efficient and they make a lot of money, but at the end of the work I was doing was very basic, right? Anyone could do it.

So, there’s not a lot of intelligence used and all that. They wanted some very smart people to do their job because of the stakes there. But the job itself was very simple. So, I felt like this is not what I want to do for the rest of my life.

I really want to do something. A, I was very interested in doing something on computer side, and B, I want to do something where I’m using more of my mental bandwidth than my physical attributes. And one day when I realized I want to leave this job well. So he, would reach out and he would speak a lot and I don’t want to do this job anyway, so maybe explore this a bit.

[00:18:55] Karthik Reddy: And then, how does the brainstorming at that age, without necessarily knowing every problem in the world, how did you arrive at this? 

[00:19:01] Harshil Mathur: I don’t think we started with the startup. We said let’s start spending our weekends and evenings building something. The good part about MNC jobs is you have a lot of free time in evenings and weekends.

[00:19:10] Karthik Reddy: Both of you in the US at that point?

[00:19:11] Harshil Mathur: I was in middle East. He was in US.

[00:19:13] Karthik Reddy: Okay.

[00:19:13] Harshil Mathur: So, we would spend our weekends in the evenings, like coding and writing stuff. So, we started chatting a lot, discussing various ideas, building stuff, and we started building this social crowdfund platform.

[00:19:23] Karthik Reddy: Yeah. Go to me or something.

[00:19:25] Harshil Mathur: Yeah. It was not really a startup. It was more like we used to see in Facebook, people would share that, Hey, I want to raise some money and can somebody help and all that. We said, can we make it more structured?

[00:19:34] Karthik Reddy: A lot of them are good lifestyle business. They’re still around.

[00:19:36] Harshil Mathur: Yeah. So it’s not like we can just build a simple way that if somebody’s going through something hard, they can put it up on Facebook and people can contribute 2 rupees, 5 rupees, 10 rupees and maybe add up to some amounts.

[00:19:45] Shashank Kumar: Yeah. We want to push, what I feel is still unsolved to some extent is that. Most of the white collar employees in India don’t make any donations.

[00:19:54] Harshil Mathur: Yeah. Philanthropy in general is not democratized.

[00:19:57] Karthik Reddy: That’s correct.

[00:19:57] Harshil Mathur: It’s not easy to do it. So how can we do that? So that was the idea. But one of the core problems that you need to solve for that is payments. Because..

[00:20:04] Karthik Reddy: That’s how you hit upon payments? 

[00:20:05] Harshil Mathur: That is how we hit upon payments. We said, yeah, this sounds easy. We start building it. Then we sort of payments. Yeah, we’ll plug in something. It’ll be easy. 

[00:20:12] Karthik Reddy: Yeah. 

[00:20:12] Harshil Mathur: Then we started going through the pain of payments.

[00:20:14] Karthik Reddy: Ah. 

[00:20:14] Harshil Mathur: And it is quite painful to go through payments. 

[00:20:17] Shashank Kumar: In fact, when we spoke to some banks and incumbent for the payment aspect, payment gateway, right? The list of questions itself was very scary. Hey, how long have you been operational? Are you profitable? Where is your physical office? Can you send us photos of your office. 

[00:20:32] Harshil Mathur: Can you send us four years of bank statement? Can you send us like your photos of office? Can you?

[00:20:37] Karthik Reddy: So no trust at all. Assume that you were up to some shady activity.

[00:20:41] Shashank Kumar: No, I don’t think it was that they don’t even trust, this is the process.

[00:20:45] Karthik Reddy: No, that’s what I meant.

[00:20:45] Harshil Mathur: It was almost.

[00:20:46] Karthik Reddy: Somebody had written it, nobody challenged it.

[00:20:48] Harshil Mathur: It was like the bank underwriting process was applied to payments as well. And he said, you’re giving us payments why are you underwriting? That you can make and yeah, we understand that there’s some underwriting required. But it’s a one or two day, you’re not giving me a six month loan. Because the process was same as a six month loan. Essentially, exactly same as a six month loan process.

[00:21:04] Karthik Reddy: Understood.

[00:21:04] Harshil Mathur: So, that made no sense to us. So we started saying maybe we have a bad experience. So we started… the Facebook was very popular. We used to go to Bangalore Startups, Pune Startups. These Facebook groups were very popular. So we started asking people. And we realized almost everyone has the same experience.

So, people said, Hey, just start accepting cash. It’s easier to accept cash in India than to accept digital payments. And that made no sense to us. Like we spoke to each other, like how could something digital be harder than the physical? But like the point of internet or point of technology over the years has always been democratization.

[00:21:32] Karthik Reddy: That’s correct.

[00:21:32] Harshil Mathur: Like internet gives everyone a way to connect with people. Social media gives everyone a voice. Most of technological advancements have been around democratization, making easier and cheaper for people to get access to. 

[00:21:40] Karthik Reddy: Yeah. 

[00:21:42] Harshil Mathur: With that, we started spending more and more time because it felt like a very universal problem, which a lot of people were facing.

[00:21:47] Karthik Reddy: Yeah. 

[00:21:47] Harshil Mathur: And we started think maybe there’s something to be done here. So, that’s how we went deeper into it.

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[00:22:45] Shashank Kumar: I think the part that we thought about that it should be easy for anyone sitting anywhere.

[00:22:50] Karthik Reddy: Understood.

[00:22:51] Shashank Kumar: To accept payments in India. Whether it’s in college or in a one person bedroom, it doesn’t matter, right? You should literally be able to go out and start accepting.

[00:23:00] Karthik Reddy: So when did you quit and move back? Or when did you get started really on? When did the first Razorpay deck happen? Those are always memorable moments.

[00:23:07] Harshil Mathur: Yeah, so it’s very interesting. We started building for.

[00:23:08] Karthik Reddy: Was it Razorpay on day one? 

[00:23:10] Harshil Mathur: I think we started thinking of names. But yeah, the name was Razorpay very early.

[00:23:13] Karthik Reddy: Okay.

[00:23:14] Harshil Mathur: Mostly because the domain was available. We read the Paul Graham essay that find the dot com. So you need to have a dot com available.

{Alok’s comments: ​“Find the dot com” — while sounds like a simple call to action, actually has a deeper connotation — i.e to find opportunities and build on them. The importance of finding opportunities that could translate into scalable and sustainable businesses solving a real problem grounds up stays as relevant now, as it was in early days of internet ( or the dot com era, as they say)}

[00:23:20] Karthik Reddy: So you were already Paul Graham fans before you went?

[00:23:23] Harshil Mathur: Yeah, we started.

[00:23:24] Shashank Kumar: Yeah, because of the college lab and all that we did, we used to read Paul Graham’s.

[00:23:28] Harshil Mathur: We used to read paul Graham’s essays since college.

[00:23:31] Karthik Reddy: Got it.

[00:23:31] Harshil Mathur: So we started spending a lot of time discussing with each other. So we started building the product. Now, typically, the way payments work is you first get because most people who build payments are people from banking or in finance industry. 

[00:23:42] Karthik Reddy: Yeah. 

[00:23:42] Harshil Mathur: You first get the bank APIs and partnerships, then you build a product on top of it. And that’s why most payment companies at that point of time used to look very similar. 

[00:23:49] Karthik Reddy: Yeah. 

[00:23:49] Harshil Mathur: Because the base layer was a bank one and you built on top of it. Fortunately or unfortunately for us, we didn’t have access to the bank side. Because we were two techies. We had no connect to the banks. So we started building a product, assuming how a merchant or a business would accept payments, and we started building from that lens.

That’s why Razorpay’s integration looked very different at that point of time compared to any other payment gateway, because we didn’t know what the base looks like it was, we assumed that’s a black box and let’s build it outside in. So, we started building a product and everything, But we didn’t leave jobs because we were not sure we’ll even get access to the banking part easily.

So, we started speaking to banks. I remember one of my off days, I was in Jaipur in my hometown, and I went to an HDFC branch next to my home and I walked in and I said, Hey, I want to start a payment gateway. How do I go about it? The guy looked at me and said, do you want a payment gateway? I said, no, I want to start a payment gateway. And he had no idea.

Nobody walks into Jaipur branch and says, I want to start a payment gateway. So he said, I don’t know how to go about it. I can give you a payment gateway if you want. He spoke to somebody in Delhi and somebody and said, this is not handled in Jaipur. You have to go to somebody in Mumbai and get it done.

[00:24:45] Shashank Kumar: When I spoke to someone in one of the branches in Patna bank branches, they hadn’t heard of payment gateway. So they’re like, what are you talking about? 

[00:24:58] Karthik Reddy: And obviously flabbergast without knowing the banking system, how do we even get off the ground? 

[00:25:07] Harshil Mathur: Yeah. So we just took these assumptions. Let’s assume this is a black box. Something will come here. What would a customer expect?

[00:25:14] Shashank Kumar: Keep poking the back box in different ways.

[00:25:17] Harshil Mathur: And then he somehow, so this bank process was running parallelly. So we didn’t leave our jobs till we knew the bank part was sorted. So got connect to this guy in another bank, where I went to, and then we got connect to this guy in Mumbai.

Then, we got connected to this guy in Delhi. I went to meet this guy in Delhi and he rejected us. Then we went to meet a different bank, a different guy in Mumbai and he rejected us. So we started speaking to, going to different banks and then all these, he spoke the phone.

[00:25:41] Shashank Kumar: There was some refinement we used to go to.

[00:25:43] Karthik Reddy: You 

[00:25:43] Shashank Kumar: learn from your.

Yeah, so we used to go to bank branches in t‑shirts and all, and we upgraded to shirts. Then we upgraded to suits. We would go to bank branches, right? Then we would reach out to people in regional HQs. Then we started reaching out in central HQs, like in Delhi and Mumbai.

[00:25:58] Karthik Reddy: In a classic iteration.

[00:26:01] Harshil Mathur: A lot of older guys in banks reject us, so we started trying to find a little bit younger, but we senior guys and see, hey, maybe they’ll understand what we’re trying to do.

[00:26:07] Karthik Reddy: This is awesome. Awesome network lessons for anybody who’s listening and this is how young founders get started.

[00:26:13] Harshil Mathur: So, you hack your way through it. Hustle your way through it.

[00:26:16] Karthik Reddy: Rumor has it, there were 100 plus rejections.

[00:26:19] Harshil Mathur: I don’t think I ever kept count, but yeah.

[00:26:20] Shashank Kumar: I think we met a lot of.

[00:26:22] Harshil Mathur: We met hundred’ish bankers, I would say.

[00:26:22] Karthik Reddy: Hundred’ish bankers.

[00:26:24] Harshil Mathur: In this journey.

[00:26:25] Karthik Reddy: And then they were asking then finally, what is the first breakthrough?

[00:26:28] Harshil Mathur: So we found this finally, this one guy in Mumbai. I remember it was in February 2014. I had a meeting with.

[00:26:38] Karthik Reddy: As early as 14, you guys were up with the product? 

[00:26:40] Harshil Mathur: Yeah, we were pushing for this. Product was being built in the site, assuming that something is there. So we met this guy who said… who heard us out, is relatively younger. He was a guy from XLRI, relatively younger. He was heading that region. So he said, okay, I can give you an approval. I understand what you’re trying to do, but it’s still risky for us. So we’ll give you an approval and in-principle approval, but you need to give a 25 Lac security deposit because there’s still risk, because you guys are not from finance background.

[00:27:07] Shashank Kumar: And also get through our compliance process.

[00:27:11] Harshil Mathur: Which we downplayed. We thought, okay, now it’s all good. So we had in-principal approval. And then I spoke to Shashank. He said, okay, 25 Lac is a lot because you are from middle class background, you didn’t really have 25 Lac liquid. 

[00:27:20] Karthik Reddy: Yeah. 

[00:27:21] Harshil Mathur: So, Shashank spoke to his grandfather who had some property sale money and something like that. He said, okay, I’m… his grandfather agreed to loan us that amount and remember that date because.

[00:27:31] Karthik Reddy: Your first angel investor, friends and family as always. 

[00:27:33] Harshil Mathur: Remember that day because the next day I went and left my job in Schlumberger. Literally next day I went and left, and said now we are doing this fulltime.

[00:27:40] Karthik Reddy: Yeah. 

[00:27:41] Harshil Mathur: The funny part was I didn’t tell him that I’m going to leave my job. I left my job. I called him that I left my job. When are you coming back? And he said. You already left let me think about it. 

[00:27:50] Karthik Reddy: It is a commitment to the investor as well. Like since then. The day you’ve touched money.

[00:27:54] Harshil Mathur: Now we are making security deposit. We are doing this full time. Let’s do it full time. 

[00:28:00] Karthik Reddy: And, at that point, just curious because I have two young founders here, I’m getting every element of their journey. Did you feel like this is… we’ll see how it goes? Or did you feel like, man, now, going back to my word for the season, did it feel like destiny is finally calling? Did you feel like we can build something phenomenal out here?

[00:28:20] Harshil Mathur: Yeah. We’re both very optimistic by nature, so we both were thought like, we’ll figure it out. This was the only part in that… because by this time, we had read enough about regulations. We had spoken to enough bankers. We’d spoken to enough startup guys. We are convinced that this is a problem that needs to be solved. We were convinced that if we solve it, it’s a large problem statement. End product part we were never like under confident. We knew we can build a good product.

Like we started building it. We started speaking to people. The only thing we were under confident is the banking side. So once that got started, we said everything else is. 

[00:28:48] Shashank Kumar: Yeah, banking. How will sales be? All of those questions are always there. It was not like, Hey, this is destiny. It was not like that.

[00:28:55] Karthik Reddy: Okay.

[00:28:56] Shashank Kumar: But it felt very exciting to… I think that banking approval, by the way, happened after almost like four months of effort.

[00:29:02] Karthik Reddy: Yeah, I am sure. 

[00:29:03] Shashank Kumar: So, it felt hey, if we have gotten it.

[00:29:05] Karthik Reddy: Banks are as good as any administrative system in this country. 

[00:29:08] Harshil Mathur: It was still not a final approval. From this in-principle approval to our first live transition took us a year. So, it was a almost a year of legwork from there to get compliance and all this stuff.

[00:29:16] Shashank Kumar: Because this compliance approval was like a big beast in itself that we had to go through a lot of process. 

[00:29:23] Karthik Reddy: And, what came first? Did you start looking for people to hire? Did you go raise money? Did you go to YC? Just a sequence of things that

[00:29:30] Shashank Kumar: No. I think we.

[00:29:31] Karthik Reddy: Happened in 14.

[00:29:32] Shashank Kumar: We, just had. So I came to Jaipur. We both of us shifted to jaipur. We got some interns from our college. We kept building the product. 

[00:29:41] Harshil Mathur: Yeah. Interns like… We have juniors from our college who knew us and we said, we are building something cool. There was summer vacations coming and why need to come down and let’s built. And so these guys came.

[00:29:48] Karthik Reddy: So summer of 14.

[00:29:49] Harshil Mathur: Yeah, summer of 14, these guys came down. We started building stuff together. So then some of these guys, of course went back to college after the vacations got over, they kept working with us on their free time and we kept building stuff together at that point. The compliance process was still going on. That was taking its own effort. We started speaking to customers who could be potential customers. Getting them ready because every time we thought, okay, now it’s just next month is going to get done. It still took us six months from there, but he thought it’s going to get them next month.

So, we started getting customers ready and all these things were running in parallel at that point. I think YC… in around October that year, we are applied for YC. YC application opened up. As I said, we used to read Hacker News a lot.

[00:30:28] Karthik Reddy: There weren’t too many people. There were people who were aware. The ecosystem was aware, but not remotely close to what it is today.

[00:30:34] Harshil Mathur: We had zero expectation of getting into YC. We just saw that form. We thought there’s no harm.

[00:30:39] Shashank Kumar: There’s no harm in applying.. 

[00:30:39] Karthik Reddy: Nothing to lose.

[00:30:40] Harshil Mathur: Nothing to lose. Yeah. but we put our efforts in and let’s put our effort in, let’s write that.

[00:30:45] Karthik Reddy: By the way, your team’s been kind enough to give me a print of your first pitch, so, tell me, was this the pitch that got you into YC?

[00:30:54] Harshil Mathur: No. No. This, no, this was post YC.

[00:30:55] Karthik Reddy: I know this is post YC, but was it very similar? 

[00:30:56] Harshil Mathur: Similar. We said, we are building online payments. And the good part about the YC process is a lot of these questions that YC asks in the form are things that you should typically think through when you’re doing a startup. But you don’t generally, because you.

[00:31:06] Karthik Reddy: It just allows you to structure your thought.

[00:31:07] Harshil Mathur: Yeah, because you organically move towards it. So it allowed us to structure… what are we doing? What are we doing differently? Why will people use us over the available methods? I think they’re very simple questions but they help you think through.

[00:31:19] Karthik Reddy: It looks like that’s become this deck.

[00:31:20] Harshil Mathur: Yes.

[00:31:20] Karthik Reddy: I leaf through it and the one thing that stood out was just the simplicity of the proposition. No, mumbo-jumbo, no rocket science. This is a basic problem. I know how to solve it better. I’m solving it. 

[00:31:34] Shashank Kumar: And that’s basically what we… 

[00:31:38] Karthik Reddy: Feels like that when you go through the deck. But yeah.

[00:31:40] Harshil Mathur: So, we got into YC.

[00:31:41] Karthik Reddy: And back then, they used to ship you back into the US right? 

[00:31:44] Harshil Mathur: Yeah, so they called us to US first for the interview. It was a 10 minute interview if we flew onto to US. And we had, again, zero expectations, but we got that call from YC that you are in. And we are over the moon.

[00:31:54] Shashank Kumar: So we are very excited to just go to US. Because they said like they’ll cover our.

[00:31:59] Karthik Reddy: That’s right.

[00:32:00] Shashank Kumar: Travel costs.

[00:32:02] Karthik Reddy: It’s a big kick for a young.

[00:32:04] Harshil Mathur: Then January we moved to YC, we moved to Valley, Jan to March. We hadn’t gone live yet. We got into YC and Jan to March, we were in YC and at that point, 

[00:32:13] Karthik Reddy: we went live around in March.

Of course, you’re a poster child for obviously YC success in India. One of many, but like one of the early ones, and I think you’ve said that I loved you, that whole experience. I loved you to think much bigger, 10 x bigger.

What specifically do you think YC did? Are we beginning to do that in India? Whether it’s accelerators, whether it’s VCs, are they helping entrepreneurs think like really big? 

[00:32:37] Shashank Kumar: I would say the process that YC has, right? Which is getting the smartest folks in the room, smartest founders in the room, right? And having that shared sense of community because you see all the other founders struggling, but everyone making an effort to grow 10 to 100x. That makes it very normal. That makes you feel that, hey.

[00:32:58] Harshil Mathur: This is okay.

[00:32:59] Shashank Kumar: This is okay. I can do this. 

[00:33:00] Harshil Mathur: Be failing every week is okay. Like you just need that because it’s a very lonely journey in the old days. Like the grunt that you had to put in, the effort you to put in, it’s very easy to burn out and say. What am I doing? Like I’ve spent six months and nothing has moved. 

[00:33:11] Karthik Reddy: Yeah. 

[00:33:11] Harshil Mathur: But when you meet that same group of people every week who say, yeah, we are all in the same boat. We are all trying the same things we are. Somebody’s failing at sales, somebody’s failing at hiring, somebody’s failing at marketing. Somebody’s doing really well one week and then failing next week. Like you see all of those journeys in the same group. 

[00:33:25] Karthik Reddy: So, it’s like an intensive community kind of feeling. 

[00:33:28] Harshil Mathur: Yeah.

[00:33:28] Shashank Kumar: Yeah.

[00:33:29] Karthik Reddy: That you all lean on each other.

[00:33:30] Shashank Kumar: Yeah. I would say the other good thing, which I feel still is not there for a lot of early stage founders. In some sense, YC allows you to just say, look, just focus on building the product and talking to customers. That’s it. Because a lot of early stage founders feel that, Hey, maybe talking to investors, raising funds, hiring… these are the problems that you should focus on.

But that is not the case. The main thing that you have to focus on, hey, how do you build your product and get in the hands of customer? And get to some traction, get to some customer level. That’s all that matters. 

[00:34:02] Harshil Mathur: The three months focus of YC is just removing all distractions and focusing.

[00:34:05] Karthik Reddy: Just clarity.

[00:34:06] Harshil Mathur: On getting a report out. Yeah, like getting your customers in and they really discourage you from spending your time on anything else. So they just tell you that don’t spend your time on hiring, don’t spend your time on fundraising, PR. All of these things that you start feeling a founder’s job are not the core job. The core job is building a product and sending to customers. 

[00:34:21] Karthik Reddy: And a customer loving that product. So that happened while you were at YC or once you had to move back and then.

[00:34:26] Harshil Mathur: From YC. And it continued from YC.

[00:34:29] Shashank Kumar: We launched during YC.

[00:34:30] Karthik Reddy: And, so tell us customer number one, usually when we see folks selling enterprise, SMB, they’ve come from those backgrounds. They know what the sales motion looks like. How did it play out for you? 

[00:34:42] Harshil Mathur: So we used to work in this coworking place in Jaipur. ​‘Cause he had moved to Jaipur and we started building there. We had lot

[00:34:48] Shashank Kumar: Yeah. Startup oasis.

[00:34:48] Harshil Mathur: Startups oasis. There a lot of people who were building in the same co-working space. 

[00:34:53] Karthik Reddy: Yeah.

[00:34:54] Harshil Mathur: Somebody was building something in e‑commerce. Somebody was building something in navigation and something like that. So we started speaking to them that, Hey, we are building this payment gateway, why don’t you try us? And, so those were our first customers. The first customer was a very small e‑commerce company, which used to sell t‑shirts for actually kids, kids clothing. And we got them on board. They still use Razorpay. And…

[00:35:13] Karthik Reddy: Wonderful.

[00:35:14] Harshil Mathur: That was the first customer that went live. Very tiny. That was the first customer that went live. 

[00:35:18] Karthik Reddy: Awesome. And then, it feels like you hit, you didn’t need to advertise, you suddenly started getting more signups. What drove that momentum? What is your, like PMF, the GTM as they say in our jargon? 

[00:35:31] Shashank Kumar: So, I’ll tell you two things. One, just the launch with the YC backing got has great traction in media because every media cover.

[00:35:40] Karthik Reddy: That’s right. Everybody suddnely knew you.

[00:35:41] Shashank Kumar: That was a unique thing at that point of time.

[00:35:43] Karthik Reddy: That’s true. That’s true.

[00:35:45] Shashank Kumar: So, suddenly, like we had a lot of customers who were aware of us.

[00:35:48] Karthik Reddy: Yeah, especially the startup crowd follows everything. So they’re all aware suddenly of a company.

[00:35:52] Shashank Kumar: Yeah. But I think we were still very new and very young. So it was not something that was, repeatable. It was just a spike of awareness that we got. But I think we focused on okay, how do we get customers? And what we cracked was one specific channel, which is going to all the Facebook groups and all the WhatsApp groups, and there’s going to be a, startup group in Bangalore, startup group in Mumbai, Pune, Jaipur. So we go to all those groups and we’ll talk about…

[00:36:16] Harshil Mathur: That was our GTM strategy. 

[00:36:16] Shashank Kumar: Yeah.

[00:36:16] Karthik Reddy: Okay. 

[00:36:18] Harshil Mathur: Both me, him, like all the early folks we got, we will all hang out in all of these groups and.

[00:36:22] Shashank Kumar: Anyone who wants a payment gateway.

[00:36:23] Harshil Mathur: Anyone would say they want payment gateway, we will get them. And we give them really, like high touch, end-to-end experience. So, once they went live with us, they loved us so much that anyone else now posted about payment Gateway, we didn’t have to respond. Somebody else would say try this. Try that.. 

[00:36:36] Shashank Kumar: They’ll recommend. The word of mouth for us was extremely strong. And see, these are the smallest of customers, so the incumbents are not paying attention. And most of the incumbents at that point of time, we are only focused on enterprises. 

[00:36:47] Karthik Reddy: That’s correct. 

[00:36:47] Shashank Kumar: Because that’s where you get revenue and volume.

[00:36:50] Karthik Reddy: That’s right.

[00:36:50] Shashank Kumar: With these folks, there’s no have revenue, no volume, but there was a lot of, customer love and word of mouth that we could generate.

[00:36:57] Karthik Reddy: No, I’m witness to this, because we are on the same Roorkee entrepreneur group. Yeah. Shashank is very quiet, so I don’t even know if he’s on it. Harshil at least acknowledges it. But I remember two things distinctly about that WhatsApp group. One is if anybody asks even a single question around Razorpay, CEO will come and reply.

[00:37:16] Harshil Mathur: Absolutely.

[00:37:16] Karthik Reddy: And I think people are delighted that he’s there. He is replying, he is watching anything that’s said about the company. And then you know that there’s a natural momentum when somebody replies on your behalf and recommends you and says, Hey, you have any questions? The CEO is here. He’ll answer those questions.

I think culturally that, think that original GTM is reflective of the culture also. I know both of you guys and probably continues down 10 years in into race or.

[00:37:41] Harshil Mathur: Even today. Like my team jokes that if there is a customer complain on Razropay on Twitter.

[00:37:46] Shashank Kumar: Any of the social media.

[00:37:47] Harshil Mathur: Or any social media.

[00:37:47] Shashank Kumar: WhatsApp groups.

[00:37:48] Harshil Mathur: Yeah. I post into our discuss group before my team can identify it and sometimes the teams like, how do you get this first? 

[00:37:55] Karthik Reddy: No, but I’ve seen this as a mark of some stellar founders, so congratulations on being that obsessed.

{Alok’s comments: This part of the conversation, about deploying an organic GTM strategy which is high touch was quite interesting. The fact that word of mouth equals lived experience and hence is a powerful source of organic referrals was quite striking. And the fact that the founders continuing to be engaged even at this scale.}

[00:38:00] Harshil Mathur: And B2B, that is like servicing is a key. 

[00:38:04] Karthik Reddy: Yeah. 

[00:38:05] Harshil Mathur: Right? In B2C and sometimes the products shine and sometimes other things shine. Really servicing is the core key component. Because B2B, a lot of our sales is always word of mouth. Even today, like even in the enterprises, some guy uses this Razorpay in, let’s say Swiggy and built it out. And tomorrow he moves to Zomato. If he loved our experience in Swiggy, he’ll say in Zomato, Hey, why don’t you use Razorpay? So, the word of mouth is one of our core drivers of business. 

[00:38:30] Karthik Reddy: So far it sounds like a fairytale, relative to what startups go through. No.

So, let me break the momentum and say, walk us through some of the pains of those early stages, like as much as you’ve said, it’s iterative, it takes long, it’s still relative to 90 out of 100 startups, this sounds smooth.

So two sets. One, what did customers dislike, hate, give crap back to you on product? Which some of it you take and you take it as founder ego and say, I will, prove them wrong and did it help you build a better product? Any examples of that?

And the other is, team dynamics, like you both seem again… to the outsider, you seem like the best couple, right? So what would you guys fight on? How did you resolve that? What is your operating style on fixing your conflicts? So anyone could take.

[00:39:25] Shashank Kumar: See there were a lot of tough moments.

[00:39:27] Karthik Reddy: I’m sure. I’m sure. 

[00:39:28] Shashank Kumar: I was just trying to bring them out.

Yeah. The whole banking process itself was very painful to the extent that we thought is this the right field to be in that?

[00:39:38] Harshil Mathur: ​‘Cause you see other startups who are building and deploying and launching. And then we would come back and say, yeah, we are just still waiting for banking.

[00:39:45] Shashank Kumar: We’re still waiting for banking. 

[00:39:46] Harshil Mathur: We’re still waiting for… it feels you are not in country of your destiny like most startups are. A lot of times we remember we sat down and said is this the right space to build? Imagine like, it took us four or five months to get the in-principle approval. It took us a year from there, so almost gestation period of one and a half years to do a first customer go live. In most companies that… most places that doesn’t happen. So that was one place where we constantly kept debating it. Is this the right space to build it? 

[00:40:11] Shashank Kumar: There was another issue that I think we had signed up with one of the payment gateways to resell their system. And we had taken some customers live on it, and then.

[00:40:22] Harshil Mathur: One sudden day they shut it.

[00:40:23] Shashank Kumar: They pulled a plug. 

[00:40:24] Karthik Reddy: Wow. 

[00:40:24] Shashank Kumar: So, we had a very. 

[00:40:27] Harshil Mathur: Actually what happened is that our YC news came out. They assume we are a very small player. And they worked with us. And our YC news came out and they realized these guys seem large. Because YC was covered in everything. We still feel small. 

[00:40:37] Shashank Kumar: They’re not a partner or something like that.

[00:40:37] Harshil Mathur: They thought these guys would be competitors. So they just suddenly pulled the plug and shut it down. So all our customers were suddenly unable to process payments. And in that situation, what do you do? Because unlike anything else, you can’t just move it to something else.

You can just suddenly can’t run the operation somewhere. These are guys who tested us in the early days. So, one thing we did in that case is we had like a five member team and we told everyone that we have to call every single customer and explain what has happened and how do we manage that.

Like we will not stop picking up phone calls, no matter what happens. So there are customers who called us. They’re literally customers who abused us on phone, massively, because like their business is impacted, and I can empathize. But they like proper Hindi abusers that the guys gave on the phone.

I said, no matter how many times he abuses, we will pick up the phones, we’ll hear them out. We’ll explain our viewpoint. We’ll tell what we are doing. And we didn’t miss a single call. Some of those customers, of course, we fixed it all within a week and customers are lives. Some of the customers still continue with us and they’re very happy with the way we handled them over that year.

So, those are times that also builds that camaraderie, but truly was very painful. 

[00:41:42] Karthik Reddy: There was character in camaraderie.

[00:41:43] Harshil Mathur: Yeah, it’s easy to say today, but it was very painful in that moment.

[00:41:46] Karthik Reddy: This is a good time to talk about IDFC FIRST Bank, our seasoned partner. IDFC FIRST Bank has earned its reputation as one of India’s most startup friendly banks through its FIRST Wings program, which provides dedicated mentorship and tailored financial solutions to help early stage ventures scale effectively.

Coincidentally, many of Blume’s portfolio companies, much later stage, also partner with IDFC FIRST Bank for their banking and financial needs. If you’re well-funded and scaling, they are a great lending and banking partners, and our portfolio companies would attest to that.

And then, I think, two remarkable features of maybe the business you’ve built. One is just never compromising on just building a beautiful product. Design, everything, like you hit your payment on whichever app, anyone here is using and you see this… you don’t even see it on global apps. 

[00:42:41] Harshil Mathur: Yeah. 

[00:42:41] Karthik Reddy: And if you look at payment apps, as everyone point out, the clunky, they look like very boring. So, a, how did that come in from two engineers from, you don’t see it typically in India.

And second, this business looks like you’ll have starting challenges, but once it takes off, it just scales like crazy. Were you prepared for just the speed at which things scale, both in terms of people, organization building and just technology and what it takes to build a backbone that can scale with. You’re talking about breakages. You’re at like gazillion times the scale as 2015. So, what are the key? What stand out in Razorpay’s culture that make both of these happen? 

[00:43:28] Harshil Mathur: So first of all… so I just want to add on payments, right? Payments are very uniquely different business than a lot of consumer businesses. So, we are pointing scale, right? The way I tell my team is our business is like a utility company. Nobody cares when you’re doing well. Yeah, But the day you mess up for five minutes.

[00:43:45] Karthik Reddy: Yeah. Breaks it.

[00:43:46] Harshil Mathur: People are extremely unhappy. So all the things that we do every day to keep the lights on, to make sure your payments go through, we operate like sometimes it is underappreciated.

We operate a lot of times on broker infrastructure. Like sometimes the bank infrastructure is not great. Sometimes the core ecosystem on top of which we operate is not great, and it’s going down and failing. But at the end of the day, we can’t tell the customer that, Hey, it failed because this bank failed. Like they’ll blame us. And rightly so.

So it’s a core infrastructure business, which means availability is very, very critical.

[00:44:13] Karthik Reddy: 99 point, n number of nights.

[00:44:16] Harshil Mathur: Number of availability is very, very critical. And the biggest complaints to your earlier question, the biggest complaints is always around if you break, like nobody cares about a 10 new features you build. If you break for a second, all of that is down the drain.

So that is something we do build culturally because a lot of people will come from consumer ecosystems, will come from different technology ecosystems where… Move fast and break things and failure is like accepted and fine. In our ecosystem, that doesn’t work.

So we have to retrain a lot of those cultural nuances. That it’s, okay to be slow, but it’s not okay to fail. And that’s quite counterintuitive to how most startups operate. It takes a while to fix that. 

[00:44:55] Shashank Kumar: I think, on a design part that you talked about, it was a very conscious call. Part of it was because we are always inspired by using good products and being from a younger generation, I felt that we had that advantage that we have used products like let’s say, Instagram or Uber. And seeing like how good the experiences are.

[00:45:15] Karthik Reddy: Yeah.

[00:45:16] Shashank Kumar: And when you use those products.

[00:45:18] Karthik Reddy: Native to good design in some sense.

[00:45:19] Shashank Kumar: Yeah. In some sense, right?

[00:45:20] Karthik Reddy: Yeah.

[00:45:20] Shashank Kumar: And when you, again, use some of the products in India, I think you can see like how big the delta is, right? But intuitively we felt like we should design beautiful products. Not just because that’ll give you good business, but that’s just our marker of quality.

We want to design good products and that’s how we feel the world should be. And I think a very interesting thing happened as a result of that, like the impression that came out in the ecosystem is that, hey, these guys are fairly mature.

[00:45:46] Karthik Reddy: Yeah. 

[00:45:46] Shashank Kumar: These guys are fairly large. I think the impression that Razorpay always carried, which surprisingly worked well for us, given we are in FinTech where trust is very important. 

[00:45:54] Karthik Reddy: Yeah. 

[00:45:55] Shashank Kumar: That these guys are a very large company. When we were even a 10 – 20 member team. I think on the quality part, again, some of it is due to our engineering background, but I think always the case that, hey, like we want our product to stand out.

We want our product to be the best in the industry. So, we can’t take shortcuts. There has to be the culture from day one that you do everything that is needed to make the customer successful. And that’s where then some of those calls come from. 

[00:46:21] Harshil Mathur: And in fact, design was a growth hack in a way because what happens typically payment gateway, nobody knows. Like you go and pay and you move on. You don’t recognize what a payment gateway is because typically it’s a backend process.

{Alok’s comments: Design as a growth hack is a great insight Harshil shared. Design + Functionality – both are a part of product ethos and the insight that a well designed product gives an impression of maturity, scale and serves as a marker of trust, is truly powerful}

[00:46:30] Karthik Reddy: That’s right.

[00:46:31] Harshil Mathur: And unlike everything else, people are trying to minimize the time they’re spending on payments. Nobody’s really trying to spend too much time on that. It’s generally a stressful period. 

[00:46:39] Karthik Reddy: Correct. 

[00:46:39] Harshil Mathur: Because like at least in 2015 it used be, but even today it’s a stressful period. 

[00:46:43] Karthik Reddy: Yeah. 

[00:46:43] Harshil Mathur: You chose a product, you decide you want to buy it, then you go to this pay button and then suddenly there is a messages don’t press back, don’t press refresh.

[00:46:50] Shashank Kumar: Yeah. Everyone remember those messages. It was always there.

[00:46:55] Harshil Mathur: Everyone has that experience once.

[00:46:55] Karthik Reddy: OTP, looking at other device.

[00:46:55] Harshil Mathur: Everyone has an experience once that your money has been debited but didn’t get credited, the transcation didn’t complete and you are very stressed what will happen. 

[00:47:01] Karthik Reddy: Yeah. 

[00:47:03] Harshil Mathur: Whenever these stressful moments are there, there’s also another the best ways to build, trust.

[00:47:07] Karthik Reddy: Yeah, absolutely.

[00:47:08] Harshil Mathur: Because the customer’s looking for markers of trust. He’s looking for ways to realize, okay, things will go fine if I see this. So what we started doing is that we started putting Razorpay’s branding front and center.

We, of course, focus a lot as Shashank said, putting a lot of focus on how this looks, how this feels, how do we give that user a comfort in that feeling of distrust that hey, we are here and we are managing this. So powered by Razorpay.

When a transaction completes, we send you a payment successful email. We are the first ones to start sending an email from a payment gateway site. So that even if your money is debited, we tell you the payment is successful.

So, if your business hasn’t sent you confirmation, as long as we have sent you that money’s related by us. So either money will get refunded or we’ll settle to them. So started doing a lot of things.

Going back to the point of design, what good design tells me is not that It’s not that on B2B people care about like beautiful designs, but good design tells me that somebody’s put in the care to build this board.

That if they’re focused that much on design, they would’ve focused on everything else as well. That is the natural behavior people carry that if something as basic as design, they’ve solved well. Then, they would’ve done everything else well as well.

{Jatin’s comment: ​“The founders treated design as a growth hack — rare in India back then. By making payments ​‘look’ and ​‘feel’ trustworthy, they created emotional comfort in the stressful moment when money leaves your account. That’s why Razorpay’s branding became a marker of trust. In fintech, more than most sectors, trust is everything — and one of the best ways to relay that to customers is through rock-solid design.”}

[00:48:10] Karthik Reddy: I think in your case, doubly so because everything touches a consumer. The consumer mindset. Like even if the guy is paying for his business. 

[00:48:18] Harshil Mathur: Yeah. 

[00:48:18] Karthik Reddy: Fundamentally is going back and he sees Razorpay in his e‑comm purchase.

[00:48:22] Harshil Mathur: And we started seeing that.

[00:48:22] Karthik Reddy: Everybody’s in the country is a consumer of yours. 

[00:48:24] Harshil Mathur: And once people started having good experiences with us, you start seeing people come and tell us that, hey, when we see Razorpay, we feel comforted.. Because generally that experience and payments comes in, somebody sees Powered by Razorpay, I feel comforted.. Okay. You guys will take care.

[00:48:36] Shashank Kumar: I’ll tell you, I think one story, right? we went to this, RO company, water purifier company. And this was the son of the founder. So, he was the upcoming leader of the firm. And when I met with him, he said like he really liked the experience of checkout on Razorpay, and that deal got closed just because he had such a good experience. 

[00:48:57] Karthik Reddy: Good experience. 

[00:48:58] Shashank Kumar: So, to that point, a lot of people feel that design and all doesn’t carry value. At least that was a thinking last decade. Now it has changed, but this was a clear case for us that we should continue investing in it. 

[00:49:11] Karthik Reddy: So, we’ll pick up a little bit of momentum. So who actually first believed that this is a fundable idea and investible idea. So how did the that journey play out? Now, I think you have a few dozen investors on your cap table. You have 700 plus million raised, you have seven and a half billion. Everyone’s laughing the way to the bank whenever waiting for your IPO, I guess. But, yeah. 

[00:49:31] Harshil Mathur: No, I think YC, of course, YC was.

[00:49:33] Karthik Reddy: After that.

[00:49:34] Harshil Mathur: After that, we had a bunch of angel investors and Matrix, who did a seed round.

[00:49:40] Shashank Kumar: Yeah. We in fact got a bunch of entrepreneurs of India, like InMobi founders, Snapdeal founders, right? To invest in our seed round.

[00:49:47] Karthik Reddy: I think Arpit in my team says you’re one of his anti-portfolio. At some point, he met you.

[00:49:51] Harshil Mathur: I think he met a bit late.

[00:49:53] Karthik Reddy: Yeah, met a bit late and didn’t come back to the team. It’s okay. Yeah. So our loss.

[00:49:57] Harshil Mathur: A lot of founders really related to this problem. So I met Kunal Shah.

[00:50:01] Shashank Kumar: Yeah. One of our mentors.

[00:50:03] Harshil Mathur: I met Snapdeal founders, Kunal Bahl and rohit.

[00:50:05] Karthik Reddy: No, I think your recent campaign that you ran is like a testament to your journey as well, right? You’re also giving back to the founders who.

[00:50:13] Harshil Mathur: Absolutely.

[00:50:13] Karthik Reddy: Who grew up with you in some sense, right? As both companies and back to at that point. 

And then, just curious about, what does the future hold? You’ve built like this massive company. Maybe it’s on autopilot, maybe it’s not. I’ve seen some early signs of acquisitions into other markets. What do both of you dream about when you think what next? It’s been over a decade. What plans for IPO. I know you’ve reversed flipped, which I guess is your ambitions to list out here. 

And clearly everybody in this room, behind the cameras, behind everyone wants to own a piece of Razorpay. So, hopefully you’ll list sooner than later, but yeah, give us a sense of what the future holds? 

[00:50:55] Harshil Mathur: IPO is an important milestone in the journey, but I think the goal is definitely broader than that, right? I think when you start. See goals keep changing. You start the company, the idea is just to build a large company like the company can be large enough to sustain itself. ​‘Cause initially you’re just trying to survive.

{Jatin’s comments: ​“Notice how Harshil shifts the goalpost from IPO to building an ​‘institution.’ That’s a Tata-level ambition — moving from startup survival to creating a generational company that outlives its founders. This is how India can deliver its own Apple, Google, or Meta equivalent to the world.”}

[00:51:10] Karthik Reddy: That’s right.

[00:51:11] Harshil Mathur: So at some point we crossed the threshold that, okay, the company’s going to survive. I think, the next step is how do we make it large enough that it survives, but it’s large enough. And I think, at some point, like when you turn unicorn so on, you feel okay, the company’s is enlarge.

And then next step for, at least for me, the way I see it is like we build a large company. We will build a large organization, but still far away from building an institution. which is like a, generational company, a company that can outlive, the people who built it, the people who manage it.

And I think, if I look at like the examples of companies like Tatas and Reliances and so on, and HDFC Bank, for example, in the finance world, there are companies that are like really built as institutions, right? Like I think the next biggest goal for me is like, how can we take Razorpay to that level where it is an institution that runs and sustains on itself and it is dependent on me or the people who run it to make it self-sustaining.

So, I think that’s the next goal, and I think we are still quite far from there. And of course, IPO is one of an important milestone in that journey, but I think the journey is broad. 

[00:52:14] Karthik Reddy: You have your age on your side, so you guys are super young to be thinking about the next generation per se. And then this, you guys are… you are fans of Hacker News and your coders at heart, just for the coders on who are going to see the show, what about that part of your DNA helps you become very successful leaders or CEOs of such a company. Of course, the part of the product is still, a tech backbone, but how has it helped you as leader?

[00:52:45] Shashank Kumar: I think it’s the creativity aspect, the aspect that, you can code or do something and create a new product. Like you can imagine something and you can put that out there. That’s the most difficult part, I would say. And I think that’s the part that came easiest to us. That was our advantage.

And even today, I would say that’s the advantage for younger folks who are coming out there. Because trust me, like it’s very difficult to build a good product and put it in front of the customers, right?

So if you can solve the one part, which is build good product, then I think the only hard part is how do you put it in front of the customers, so you have solve one part of the problem. 

{Alok’s comments: While the ​“hustle” aspect of start-ups is often touted, the ​“creativity of tech” is not spoken about as often.
The care put in to build the product and the UX reflects in everything that the company does, by conflation. If this is good, everything else would be good as well.}

[00:53:21] Karthik Reddy: Yeah. 

[00:53:21] Shashank Kumar: That creative aspect that is there. And that’s the still the advantage for a lot of younger folks coming out of college or doing jobs because now it’s even more easy to create a company.

[00:53:32] Karthik Reddy: That is correct.

[00:53:33] Shashank Kumar: And there’s so much support available from the ecosystem. So many good VCs, so many good angel investors. So it’s easier than ever to raise money. But I think I somewhere feel that probably it’s more difficult these days to take more ambitious bets, even though it should be easier.

I feel like there’s still some distance for us in India to cover to come out and say, Hey, we should be able to do this. That is still not as common. Like even though entrepreneurship is becoming more common.

[00:54:00] Harshil Mathur: And that’s where I think we still need to catch up a lot to the Valley mindset. Like I go to Valley once a year and the kind of ideas people are trying, sometimes it just seems crazy.

[00:54:10] Karthik Reddy: Yeah. 

[00:54:12] Harshil Mathur: And for example, when I first heard of Boom Aero. somebody’s going to build a supersonic aircraft. Like you just feel like how can somebody even try that. I think we still need to get to that level.

[00:54:21] Karthik Reddy: You’re doing your own bit. You folks invest through the fund.

[00:54:23] Harshil Mathur: Yeah, we invest through the fund and we try to find such ideas. But to Shashank’s point, I think at least from our perspective, like while we are coders in background for Razorpay, the true moat is still tech, right? Our distribution, integration, everything else is of course enablers for us to get there.

But in our kind of business, the true moat is still tech, like Razorpay wins over anyone else because our tech performs better. The day the tech performs weaker than anyone else, we lose where we stand.

So, having that tech background, even though we are not coding anymore, at least I in the last 10 years, but even then, having the tech background is really critical for us to keep pushing the envelope on how can we better, how can we do more, how can we solve deeper problem statements?

[00:55:07] Karthik Reddy: It’s been fantastic, guys. Thanks for being as open, transparent. The idea is to bring out those genuine emotions of the journey. So appreciate what you’re doing for young founders who are like trying to see you as role models. That’s the idea of the show. Before we wrap up, I’m just going to do a fun rapid fire and then we’ll close with that. Maybe since you said you haven’t coded in a while, what’s the proudest thing you’ve coded for Razorpay with your own hands.

[00:55:37] Shashank Kumar: Proudest thing. It’s the payment system. It’s the same system that I coded that is to a good extent, still running today. 

[00:55:45] Karthik Reddy: One FinTech trend you’re tired of hearing about.

[00:55:49] Harshil Mathur: Web3.

[00:55:51] Karthik Reddy: Web3. YC demo day in one word or one phrase?

[00:55:56] Shashank Kumar: It is like a funding mela, maybe.

[00:56:00] Harshil Mathur: I don’t think i’ve seen anything as crazy as that. Like amount of cards that you’ve seen, amount of people. Amount of time I pitched in a day, don’t think I’ve ever done that ever.

[00:56:08] Karthik Reddy: You’ve never done that ever. Who came up with the name Razorpay? 

[00:56:12] Harshil Mathur: Him.

[00:56:12] Karthik Reddy: Who stresses more before a big launch or a big milestone?

[00:56:16] Shashank Kumar: I think harshil, more. 

[00:56:18] Harshil Mathur: Public events.

[00:56:19] Shashank Kumar: Yeah. Actually he 

[00:56:20] Karthik Reddy: is really obsessed to get it right. 

Got it. And a Razorpay feature that users love, but was very tough to build out, really proud of like having?

[00:56:30] Harshil Mathur: Payment itself was very tough to get. 

[00:56:32] Karthik Reddy: Clearly, there’s a lot of memories from that era. But yeah. Anything more of late? No.

[00:56:37] Shashank Kumar: Very tough to build. I’m just thinking like. What’s the..

[00:56:40] Harshil Mathur: Build part has never really scared us. The toughest part has always been the approval, compliance and all that. So that’s not a code. Anything on code, I don’t think we ever feel that it is tough to build. It’s always easy. 

[00:56:49] Karthik Reddy: Manageable. Yes. And if you weren’t building Razorpay, what would you be doing? I know it’s an absurd question after 10 years, but do you come up with… if you think of other founders, you think of the idea and said, yeah, I would love to be building this.

[00:57:00] Shashank Kumar: I think that changes every few years.

[00:57:03] Harshil Mathur: Today, it’ll be AI.

[00:57:05] Shashank Kumar: Yeah, for sure.

[00:57:05] Harshil Mathur: In the Valley, building something on AI.

[00:57:07] Karthik Reddy: Super. Who’s more likely to just challenge a team’s idea, just to test them or push them.

[00:57:13] Harshil Mathur: He’s quite pushy. Sometimes I have to come down and say, Shashank, let’s hold on. 

[00:57:20] Karthik Reddy: Favorite non FinTech founder. 

[00:57:22] Harshil Mathur: Non FinTech. Globally, Elon Musk.

[00:57:25] Karthik Reddy: Elon, and India?

[00:57:26] Harshil Mathur: I really like deepinder and what he is doing. 

[00:57:28] Karthik Reddy: You like Deepinder. Cool. 

One Razorpay customer story. I know you’ve said a few, but anything that again stands out as like the special memory that makes it all worth it. There’s some anecdote usually, which will be emotional.

[00:57:40] Harshil Mathur: There’s so many.

[00:57:41] Karthik Reddy: I know there are too many. I guess. 

[00:57:43] Harshil Mathur: I remember there was this meeting that I went to our customer. It was an old Delhi. The customer is still our customer, is six years back, and it was hard to reach that place.

So, I had to take a rickshaw. So I cycled rickshaw to get to the customer, and we told the customer that, Hey, we are a bit expensive compared to most players in the market. This was old, so he asked how much do you charge? He said, we charge 2%. He said, oh, I paid 7% to my bank.

And we were really surprised that, okay, the somebody in this day and age when information is so available is still paying 7 to 8% on bank charges for our transition, doing mostly cross border.

[00:58:22] Karthik Reddy: Yeah. 

[00:58:22] Harshil Mathur: You had to really spend a lot of time understanding maybe the market is wider than what we thought. 

[00:58:27] Karthik Reddy: And, last, question, Razorpay is successful because… If I had to say that, how do you complete that sentence?

[00:58:35] Harshil Mathur: Product execution.

[00:58:36] Shashank Kumar: Yeah. Because of our tech DNA. Yeah.

[00:58:38] Karthik Reddy: Awesome. Awesome. I think, today was a sort of a masterclass on, both, you’re not a perfect college startup, but it’s as good as a college startup. I think all the bonds were built there, the hacker, attitude towards building a great product we built there.

For me, it’s been a revelation. We’ve funded a few of them as well, but it’s fantastic to hear that journey. And today to be country’s number one gateway is not a mean achievement at all. And such a long way to go. It feels like a decades past, but it’s just getting started. And, yeah, waiting for you to IPO. We can all become shareholders. And Cheer you from the sidelines. But, thanks for doing this again. 

[00:59:20] Harshil Mathur: No, thank you Karthik. It was really fun.

[00:59:21] Shashank Kumar: Thank you.

[00:59:22] Karthik Reddy: So guys, thanks again for everything. A small gift from us. 

[00:59:27] Shashank Kumar: Wow. 

[00:59:28] Karthik Reddy: I just realized that we are both co-investors. All of us are co-investors in Ultrahuman. 

[00:59:32] Shashank Kumar: Nice. 

[00:59:33] Karthik Reddy: So, you get a Ultrahuman ring. 

[00:59:35] Shashank Kumar: Okay. 

[00:59:35] Karthik Reddy: And let us know the size, your color, your preferences, and we’ll get you one. I know both of us are happy with how these guys are progressing. But

[00:59:43] Harshil Mathur: One of our favorite investement. 

[00:59:44] Karthik Reddy: Yeah, but they’re rocking in the US and let’s keep cheering them on. 

[00:59:47] Shashank Kumar: Well, thanks a lot for the gift. 

[00:59:48] Karthik Reddy: Harshil, thanks again for everything. And here’s your goodie bag. 

[00:59:51] Harshil Mathur: Thank you. 

[00:59:52] Karthik Reddy: Hopefully you got the t‑shirt size right. 

[00:59:54] Harshil Mathur: That’s right. 

[00:59:54] Karthik Reddy: And your kit as well. 

[00:59:55] Harshil Mathur: Oh, nice. 

[00:59:56] Karthik Reddy: So, hopefully both of you’ll be sporting a ring the next time we see.

[00:59:58] Shashank Kumar: Yeah, yeah.

[00:59:58] Harshil Mathur: Yeah, yeah. 

[00:59:59] Karthik Reddy: Super. Thanks a lot again. 

[01:00:01] Shashank Kumar: Alright. Yeah. 

[01:00:02] Karthik Reddy: Great pleasure having you on the podcast. 

[01:00:03] Shashank Kumar: Thanks for having podcast.